Credit History Check: How to run a credit check on someone

Image by mangpages (via Flickr)
Image by mangpages (via Flickr)

How to run a credit history check

There are many different reasons that you might want to run a credit history check on someone. Two of the most common reasons are for landlords to check the history of a tenants credit, or for an employer to verify the credit history of a prospective employee (this latter situation is often necessary for work in a field related to credit, finance, etc.).

  1. The first step is to compile all of the necessary information of the person that you want to perform a credit history check on. You will need their full legal name and social security number in order to run the credit check.
  2. You are legally required to obtain written permission to run a credit history check from the individual. This must be a separate document from the physical job application. Make sure that the document you use explicitly states that as a potential employer or landlord you are being given the right to request a copy of the credit report. The company that runs the credit check will likely have additional documentation that you are required to fill out before they perform the check.
  3. Find a company that specializes in what you are looking for. If you're a landlord, the National Tenant Network is one example of a company that provides resident screening. This service actually goes deeper and includes such things as verification of previous employment and rental history. If you're a prospective employer, AccuScreen is an example of a company that can help you. They also will help you screen full background such as education verification and a criminal history check.

Why run a credit history check?

First and foremost, you should know that it is illegal to use a consumer provided credit history to make any credit based decision.  So while it may seem mutually beneficial to just accept a document given to you from a tenant (you save money and they save a couple points on their credit score) you are technically breaking the law when you do this.  If a potential tenant is upset because of this, remind them that you are only following the letter of the law.  Additionally, let them know that when multiple credit checks occur within the same industry over a 21 day period, it actually only counts as one "hit" against their score.  Most tenants are prepared to pay an application fee when they are interested in a property, so that should cover the amount that you will be required to pay to run their credit history check.

Whether you're screening applicants or tenants, it is in your best interest to do some due diligence by running their credit.  The plain truth of the matter is that many people will lie about their history in order to improve their chances.  This doesn't mean that you should disqualify someone just because they've run into problems in the past, but it does give you a clearer understanding so that you can make a fair decision.  The worst case situation would be one where you choose a liar with a horrible track record over an honest person who is willing to admit that they had ran into problems in the past.

Can I run a credit history check on myself?

Of course you can.  It's a good idea too.  So long as you avoid any of the companies that pay sell out bands to sing stupid jingles (the FTC agrees with me about this).

If you want to take a look at your credit, go to Annual Credit Report.  The government requires the three credit bureaus to provide you with one free report every year.  A good strategy is to check with one of the bureaus every four months so that you get a few free opportunities to look every year.  Make sure that their isn't any fraudulent activity while going over your credit report.  Be aware that since these three companies are independent of each other, there is no guarantee that they have identical information on file (in fact, they almost definitely have some minor differences).  What you don't get with these free credit reports is a "credit score."  That number isn't something that most landlords or employers use as much as mortgage companies or credit card providers.  In fact, many times they also don't pull a score since it costs more.  Landlords and employers are generally more concerned with whether you have bankruptcies, collections, or other major adverse items in your credit history.

Check Credit History Video

Have more questions about running a credit history check?  Feel free to ask in the comment section below.  Thanks for reading!

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